ATLANTA — The Georgia Supreme Court
heard arguments Tuesday on whether the county’s plan to use up to $397 million
in bonds to finance the construction of the new Atlanta Braves stadium is
legal.
Three Cobb residents have appealed a July Cobb Superior Court decision validating the bonds to the state’s high court, which is expected to make a ruling on the case within six months.
In front of a crowded courtroom — made even more crowded by a visiting AP government class from Buford’s Lanier High School — the seven justices on the court heard arguments about what constitutes a park, debt limitations in the Georgia Constitution and the intricacies of the contract that would allow for the bonds to be issued.
The bonds are set to be issued by the Cobb-Marietta Coliseum & Exhibit Hall Authority, a governmental organization that owns the Cobb Galleria Centre and the Cobb Energy Performing Arts Center, and will be paid off over 30 years by the county and the Braves through an intergovernmental agreement.
The county has agreed to repay the authority’s debt through a combination of countywide property taxes, property taxes on businesses near the stadium, a new $3 per night fee on hotel rooms near the stadium, excess funds from the county’s existing hotel/motel tax and a new tax on rental cars — a total of about $18 million each year.
Additionally, the Braves have agreed to pay $6.1 million each year to be used to pay down the debt.
Marietta attorney Tucker Hobgood, retired businessman and east Cobb resident Larry Savage and east Cobb attorney Gary Pelphrey — representing Austell resident Rich Pellegrino — were given a little more than 20 minutes in total to make their cases to the justices. Attorney Thomas Curvin of Sutherland Asbill & Brennan LLP defended the bond validation as the representative of the Exhibit Hall Authority.
County Attorney Deborah Dance was in the audience in the Supreme Court Chambers on Tuesday, but Curvin was the only one who spoke from the county and the authority’s side. Cobb Chairman Tim Lee and the district commissioners were not present.
Hobgood began his remarks by saying his objection to the bonds is not about the Atlanta Braves.
“The heart of this case has to do with whether the county commission was required to put it to the vote of the Cobb County voters before binding them to this long-term debt,” Hobgood said. “There was no referendum here.”
According to Georgia’s constitution, a county government cannot take on new debt more than a certain percentage of the value of the property in the county without a vote of approval by the county’s residents. The section with this limitation is known as the “Debt Clause.”
Curvin argued the state’s high court has previously ruled that arrangements similar to the one reached between the county and the authority are an exception to the debt clause.
Hobgood told the justices he believes the agreement is invalid because the portion of the Georgia Constitution allowing for such agreements only applies to projects the county has the constitutional authority to take on.
“The sole constitutional authority asserted by the county is its power to provide for parks, recreational areas, programs and facilities, and SunTrust Park, as it’s now known, does not fit into that constitutional definition. This is a non-public, professional baseball stadium.”
Curvin challenged Hobgood’s assertion in his remarks to the justices Tuesday. He said SunTrust Park is a public park because it will be owned by the Exhibit Hall Authority and the county is able to use it for up to three events per year.
“We submit that attending the national pastime — going to watch a baseball game — is quintessentially a form of recreation in this country,” Curvin said.
Justice David Nahmias commented to Curvin about whether there is an implied requirement that a public park be freely open to the public without paying a fee to a private individual, but Curvin responded that charging a fee to enjoy the park does not make it non-public.
“The fact that a public facility — a publicly owned property — charges a fee for admission does not deprive that facility of its public character,” he said, pointing to Lake Lanier islands, which he said is publicly owned, managed by a private company and requires a fee for many of the activities there, as an example.
Justice Harold Melton mentioned during the proceedings, which lasted about 45 minutes, revenue bonds “conceptually are supposed to be paid back by revenue generated from the project. We’re seeing more and more revenue bonds being paid back from general taxpayer funds that would otherwise have to go to a vote.”
After Curvin explained the bonds would be partially repaid with taxpayer money, Justice Nahmais said the county can use tax money to repay the bonds because it is not issuing them.
“So basically, to be able to do it, you have to have the authority issue the bonds and then the repayment is from the project, the project largely being the county’s agreement to use taxpayer money,” Nahmais said.
Curvin replied the agreement is based on years of precedent.
“That is the way this transaction and many others before it have been structured, in which a county partners with either a development authority or here a different type of authority to do this type of transaction,” he said.
Savage said after the court adjourned he was glad the justices were so engaged in the case.
“It was encouraging that they’re asking informed questions,” he said. “There were a lot of things they could ask questions about, but they asked questions that were impressive because they were informed and they indicated to me an understanding of what the issues are.”
Kevin Moore, of Marietta-based Moore, Ingram, Johnson & Steele, also represents the Exhibit Hall Authority and was present in the court chambers Tuesday. Moore said given the amount of money the Braves have already spent on the SunTrust Park project, he thinks the “only thing that’s at stake” is how the stadium will be paid for.
Moore said if the high court decides to overturn the lower court’s validation of the bond, there are other ways the county could help finance SunTrust Park’s construction.
“There are other alternate arrangements or other options that could be explored at that point,” he said. “We don’t think that will be necessary. We hope the court will see it our way.”
Three Cobb residents have appealed a July Cobb Superior Court decision validating the bonds to the state’s high court, which is expected to make a ruling on the case within six months.
In front of a crowded courtroom — made even more crowded by a visiting AP government class from Buford’s Lanier High School — the seven justices on the court heard arguments about what constitutes a park, debt limitations in the Georgia Constitution and the intricacies of the contract that would allow for the bonds to be issued.
The bonds are set to be issued by the Cobb-Marietta Coliseum & Exhibit Hall Authority, a governmental organization that owns the Cobb Galleria Centre and the Cobb Energy Performing Arts Center, and will be paid off over 30 years by the county and the Braves through an intergovernmental agreement.
The county has agreed to repay the authority’s debt through a combination of countywide property taxes, property taxes on businesses near the stadium, a new $3 per night fee on hotel rooms near the stadium, excess funds from the county’s existing hotel/motel tax and a new tax on rental cars — a total of about $18 million each year.
Additionally, the Braves have agreed to pay $6.1 million each year to be used to pay down the debt.
Marietta attorney Tucker Hobgood, retired businessman and east Cobb resident Larry Savage and east Cobb attorney Gary Pelphrey — representing Austell resident Rich Pellegrino — were given a little more than 20 minutes in total to make their cases to the justices. Attorney Thomas Curvin of Sutherland Asbill & Brennan LLP defended the bond validation as the representative of the Exhibit Hall Authority.
County Attorney Deborah Dance was in the audience in the Supreme Court Chambers on Tuesday, but Curvin was the only one who spoke from the county and the authority’s side. Cobb Chairman Tim Lee and the district commissioners were not present.
Hobgood began his remarks by saying his objection to the bonds is not about the Atlanta Braves.
“The heart of this case has to do with whether the county commission was required to put it to the vote of the Cobb County voters before binding them to this long-term debt,” Hobgood said. “There was no referendum here.”
According to Georgia’s constitution, a county government cannot take on new debt more than a certain percentage of the value of the property in the county without a vote of approval by the county’s residents. The section with this limitation is known as the “Debt Clause.”
Curvin argued the state’s high court has previously ruled that arrangements similar to the one reached between the county and the authority are an exception to the debt clause.
Hobgood told the justices he believes the agreement is invalid because the portion of the Georgia Constitution allowing for such agreements only applies to projects the county has the constitutional authority to take on.
“The sole constitutional authority asserted by the county is its power to provide for parks, recreational areas, programs and facilities, and SunTrust Park, as it’s now known, does not fit into that constitutional definition. This is a non-public, professional baseball stadium.”
Curvin challenged Hobgood’s assertion in his remarks to the justices Tuesday. He said SunTrust Park is a public park because it will be owned by the Exhibit Hall Authority and the county is able to use it for up to three events per year.
“We submit that attending the national pastime — going to watch a baseball game — is quintessentially a form of recreation in this country,” Curvin said.
Justice David Nahmias commented to Curvin about whether there is an implied requirement that a public park be freely open to the public without paying a fee to a private individual, but Curvin responded that charging a fee to enjoy the park does not make it non-public.
“The fact that a public facility — a publicly owned property — charges a fee for admission does not deprive that facility of its public character,” he said, pointing to Lake Lanier islands, which he said is publicly owned, managed by a private company and requires a fee for many of the activities there, as an example.
Justice Harold Melton mentioned during the proceedings, which lasted about 45 minutes, revenue bonds “conceptually are supposed to be paid back by revenue generated from the project. We’re seeing more and more revenue bonds being paid back from general taxpayer funds that would otherwise have to go to a vote.”
After Curvin explained the bonds would be partially repaid with taxpayer money, Justice Nahmais said the county can use tax money to repay the bonds because it is not issuing them.
“So basically, to be able to do it, you have to have the authority issue the bonds and then the repayment is from the project, the project largely being the county’s agreement to use taxpayer money,” Nahmais said.
Curvin replied the agreement is based on years of precedent.
“That is the way this transaction and many others before it have been structured, in which a county partners with either a development authority or here a different type of authority to do this type of transaction,” he said.
Savage said after the court adjourned he was glad the justices were so engaged in the case.
“It was encouraging that they’re asking informed questions,” he said. “There were a lot of things they could ask questions about, but they asked questions that were impressive because they were informed and they indicated to me an understanding of what the issues are.”
Kevin Moore, of Marietta-based Moore, Ingram, Johnson & Steele, also represents the Exhibit Hall Authority and was present in the court chambers Tuesday. Moore said given the amount of money the Braves have already spent on the SunTrust Park project, he thinks the “only thing that’s at stake” is how the stadium will be paid for.
Moore said if the high court decides to overturn the lower court’s validation of the bond, there are other ways the county could help finance SunTrust Park’s construction.
“There are other alternate arrangements or other options that could be explored at that point,” he said. “We don’t think that will be necessary. We hope the court will see it our way.”
Comments
Cobb
County government has gone “over the top” by subsidizing “recreation”. Given the shaky fundamentals of the U.S.
economy, many local governments are trying to shed or limit its subsidies for
recreation and avoid taking on any debt. Many voters support this cautious
approach. We have seen cities and
counties go bankrupt by over-leveraging their debt. In this case, Cobb has
taken on more gridlock near the already congested I-285 and I-75
intersection.
Norb
Leahy, Dunwoody GA Tea Party Leader
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